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Charset ? mutt issue?



Hi mutt people

I have an issue whereby when I recieve an email with an English pound
sign in it £ it is displayed as this --> "\243" [without quotes] or
somtimes it looks like "??".
I am not sure if it is a mutt issue or a a system one but I suspect
mutt.
My system is as follows :-
Gentoo linux
mutt 1.5.11
running under aterm.

Does anyone have a suggestion for this issue ?

Regards 
        stu